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CNN reports that "consumers spent $12.7 billion across the web on July 11 and 12 during Amazon’s Prime Day sales, a 6.1% jump from a year ago, according to Adobe Analytics. Walmart, Target, and other retailers also offered savings deals to customers … Adobe said it was a record two days for online shopping overall."

However, in its analysis Bloomberg notes that while there was an increase over last year, it was "less than the 9.5% gain forecast by the Adobe Digital Economic Index, which expected steep discounts would drive higher demand. So what gives?

"One read is that elevated levels of inflation are curbing demand at the same time shoppers are hearing about economists assigning a 65% chance of a recession over the next year. However, about 40% of Amazon shoppers earn more than $100,000 a year, compared with the $73,500 median household income of a Walmart Inc. shopper, and are less likely to be as sensitive to inflation. But then again, inflation has cooled, slowing for 12 months, going from 9.1% to 3%.

"Perhaps a better read is that this year’s results expose Amazon’s struggle to become not just a great delivery company but a great retailer. The struggle is more urgent than ever as Amazon’s cloud computing business suffers from a demand slowdown of its own. Although the company’s shares are up 60% this year, the are down 28% since peaking in July 2021 while the S&P 500 Index has gained almost 5%."

Bloomberg continues:  "The signs leading into Prime Day all pointed toward Amazon flexing its tech muscle to spur spending. It ramped up how it uses artificial intelligence to serve personalized deals to Prime members and rolled out invite-only discounts to create a feeling of scarcity and exclusivity. It even partnered with Booking Holdings Inc.’s Priceline to offer travel deals, including 20% off Priceline’s Hotel Express in addition to its typical up to 60% hotel discounts. It also unveiled steep discounts on goods and delivery services across its Amazon Fresh stores. This all helped to drive sales, with July 11 being the biggest day in Amazon’s history, according to Maria Boschetti, a company spokesperson.

"But even with AI-enabled personalized marketing, Amazon couldn’t force consumers to spend more than they otherwise would have. An early read of spending by consumer insights firm Numerator found the top items bought were Temptations Cat Treats, Fire TV Sticks and Liquid I.V. Packets. Shoppers were also buying Amazon’s brand name toilet paper, organic protein powder and Bissell’s Little Green carpet cleaner. This doesn’t quite prove Amazon’s success in getting shoppers to give in to their impulses and dig deeper into their pockets even with tech-enabled marketing."

And, this conclusion from Bloomberg:

"Amazon’s strength is its size. It runs the country’s biggest online delivery company, serving 167 million members. But with revenue growth slowing across its cloud business — Bloomberg Intelligence says deteriorating corporate IT spending and the lack of growth catalysts from generative AI could fail to ignite a rebound for at least two quarters — Amazon needs to sharpen its retail strategy. If this year’s Prime Day is any indication of what’s to come, Amazon has a lot of work to do."

KC's View:

I think the Bloomberg analysis is legitimate - Amazon may fairly be described as a great logistics company, but not a great retailer.  At least, not always.

I've always argued that the difference between Walmart and Amazon is that Walmart wants to sell more stuff, and Amazon wants to be connected to and be involved in every part of our lives.  My premise generally has been that this gave Amazon an advantage, but it may be that I got that wrong - that this actually has translated into a lack of focus that has allowed the company to be a great retailer.  

I think it still can be, if it wants to be.  But Amazon has to want that, and I'm not sure it does.